Key Takeaways
- First-quarter adjusted earnings per share reached $0.32, falling short of the $0.37 analyst consensus by $0.05
- Total revenue declined 7.7% year-over-year to $478.6 million, missing the $485 million projection
- North American same-store sales decreased 6.4%; international comps increased 3.6%
- CEO Todd Penegor attributed weakness to cost-conscious diners opting for smaller pizzas and fewer add-ons
- Shares of PZZA tumbled approximately 4.7% to $32.21 on Thursday, deepening a year-to-date loss nearing 20%
Papa John’s started Thursday on the wrong foot after delivering disappointing quarterly results, and investors wasted no time hitting the sell button.
Shares plummeted roughly 4.7% to $32.21 in early trading, compounding a year-to-date decline approaching 20%.
The pizza chain reported first-quarter adjusted earnings of $0.32 per share for Q1 2026, falling short of Wall Street’s $0.37 forecast. Total revenue registered $478.6 million, representing a 7.7% year-over-year decrease and trailing the consensus estimate of approximately $485 million.
Papa John’s International, Inc., PZZA
Net profit declined to $7 million compared to $9 million in the prior-year period. Adjusted EBITDA totaled $48 million, down from $50 million last year.
Chief Executive Todd Penegor highlighted inflation-conscious consumers as a primary headwind. Diners are gravitating toward smaller-sized pizzas and eliminating side items and desserts from their orders, putting downward pressure on average transaction values.
Domestic Market Weakness Contrasts With International Strength
Comparable sales in North America declined 6.4% during the quarter. Penegor noted this figure aligned with the company’s internal projections.
The international business painted a brighter picture. Overseas comparable sales climbed 3.6%, representing the sixth consecutive quarter of positive international same-store sales growth.
Global system-wide sales across all restaurants totaled $1.20 billion, reflecting a 3% year-over-year contraction.
The chain added 28 new locations during the quarter — 8 within North America and 20 in international markets.
A portion of the domestic revenue decline stemmed from refranchising activity. Papa John’s refranchised 85 locations in Q4 2025, which stripped approximately $25 million from company-owned restaurant revenue in the domestic segment.
Transformation Strategy Underway
Papa John’s is currently executing a comprehensive restructuring initiative. The strategy involves shuttering hundreds of underperforming U.S. locations, streamlining the menu offerings and reducing corporate staff.
Penegor emphasized that management remains focused on enhancing value perception and driving innovation to attract new patrons and boost incremental purchases.
Recent product introductions — including pan pizza varieties and oven-toasted sandwich options — have demonstrated promising early performance this year.
The organization is also pursuing additional expense reductions through supply-chain optimization and enhanced operational efficiency.
Looking ahead to full-year 2026, Papa John’s reaffirmed its previous guidance. The company anticipates global system-wide restaurant sales to range from flat to down low single-digits.
North American comparable sales are forecast to decline 2% to 4%, while international comparable sales are expected to grow 2% to 4%.
Adjusted EBITDA guidance remains unchanged at $200 million to $210 million, with a midpoint target of $205 million.
The broader pizza category faces significant headwinds. Pizzerias, which previously ranked as the second-most prevalent restaurant format across the United States, have now fallen behind both coffee establishments and Mexican dining concepts.
Domino’s recently reduced its U.S. same-store sales forecast following March weakness, pointing to an intensely competitive and price-conscious marketplace.
Papa John’s adjusted earnings per share of $0.32 came in below the $0.37 consensus estimate, according to FactSet data.
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